Thank goodness! My blogging days are not yet over! Sorry guys, I’ve been very busy since the day I was discharged from the Army General Hospital at Fort Bonifacio last December 2013. Right now, I’m doing a more challenging job that requires a lot of time and effort. It’s a totally different job compared to my former designations. I’m already assigned in the Division, that’s the reason for my very long absence in the blogging community. (What a lame excuse!) Anyway, I will share to you some shocking updates regarding Philippine Army Finance Center Producers Integrated Cooperative (PAFCPIC). It’s shocking especially if you’re an investor and maintain a Capital Contribution on either Regular Savings Deposit (RSD) or Preferred Savings Deposit (PSD).
PAFCPIC Extreme Control Measures
If you remember, last 01 January 2013, PAFCPIC implemented control measures minimizing the dividend rate of RSD and stoppage of PSD Capital Contribution. Also, there was a stoppage of the Share Capital contribution. Recently, last 28 February 2014, PAFCPIC released a new memo regarding their new rules in order to maintain the Coop’s sustainability effective 01 April 2014.
First, they will not accept deposits on Preferred Savings Deposit (PSD) anymore.
Secondly, there will be a reduction on the interest rate on Regular Savings Deposit (RSD) by 0.5% or from 5% to 4.5% per annum.
Lastly, there will also be a reduction of individual ceiling on RSD up to P10M. Any excess as an effect of this will be paid until individual RSD balance complies with the P10M ceiling by the end of CY 2014.
Effects to Investors
This is shocking because I’m also planning to invest on PAFCPIC for a long period of time. Now, all hopes are gone. Those who invested earlier will continuously benefit from the high dividend rate of this Army Cooperative. Lucky you! Nevertheless, I already anticipated this to happen after the release of the 2013 memo. It’s just a matter of time and I never expected it to be implemented this year. It’s time to consider other options.
Importance of Diversified Investment Portfolio
Investment losses are sometimes inevitable. It is important that we should diversify our hard-earned investment funds to other outstanding financial investment companies. A well-balanced investment portfolio could minimize losses and optimize gains.
There are two things that Soldier investors will have to consider today after the implementation of these new PAFCPIC rules.
Diversion of programmed investment funds from PAFCPIC to other investment opportunities will be the first consideration. On the other hand, the dividend rate for RSD of 4.5% p.a. is still a good investment compared to Regular Commercial Banks. Imagine, if you have P10M in RSD, you’ll get P 450,000.00 per annum or P 112,500.00 per quarter. That’s still a great investment! (For those who have that amount of money!) In connection with this, second consideration will be the continuation of Regular Savings Deposit and enjoy 4.5% dividend rate p.a. Well, it’s up to you! In this case, I already decided on this matter.
After a series of frustrating changes in the PAFCPIC rules, I could still recommend it as a good investment consideration for Soldier investors. Just always put in mind that a well-balanced investment portfolio is the key to a successful investment program. Hence, a good investment strategy will help us manage investment risk.